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Chapter 2: Business Basics
Unit 1: Marketing Basics
Learning Goals
Differentiate between economic needs and wants
Describe the three uses of money Explain how a business makes a profit Describe the three forms of business
ownership Describe the difference between a for-profit
corporation and a not-for-profit organization Identify the four functions of business and
give an example of each
Day 1 Response Journal
What do you NEED to be able to live?
Create a list.
***Save As Feb 9 in your Response Journal Folder***
Economic Needs and Wants
A _________ is something that is necessary for survival E.g. air, water, food, clothing
and shelter Includes things you need to
function in society• E.g. you need schoolbooks,
school clothes (uniform) and transportation to and from school
A __________ is something you desire, but could function without Examples???
Need
Want
Economic Needs and Wants
Everyone has needs and wants Some cannot be satisfied by buying
something E.g. you cannot buy friendship
Needs and wants that you can satisfy by buying something are called ____________________________
_______________________________ are the items you buy to satisfy economic needs and wants
Economic Needs & Wants Economic Goods & Services
The Exchange
Read the example on page 19 paragraph 6
To _____________ is to trade something of vales for something you want
You may exchange money for a;
Soft drink (a good)
A concert ticket (a service)
A cause – donate to a local animal shelter (an idea)
Exchanges are the basis of all business
Exchange
Money
____________ is a consistent item that people accept in exchange for goods or work
Without money, modern business could not exist
Money is used in three ways; 1. As a medium of exchange2. As a unit of value3. As a store of wealth
Money
1. Medium of Exchange
Read the example on page 21 paragraph 2 Money is a convenient medium of exchange
Paper money and coins are easy to carry
2. Unit of Value
Money can express the exact ________ of an item Value is how much something is worth
The dollar is the unit of value in Canada The dollar is used to express the value of
goods and services the same way km are used to express distance
The value of a product expressed in dollars is the __________
Marketers use price to set the value of a product
Value
Price
3. Store of Wealth
Money is easy to __________ It enables you to keep and store wealth in
a compact, easy, long-lasting form Money is considered a store of wealth
because it enables you store (in other words save) money until you need it
Store
What Is Business?
_______________ is the general term for activities involved in the development and exchange of products The term business also refers to a person or group
of people who are involved in the development and exchange of products
A business can be large (e.g. General Motors) or small (e.g. a lemonade stand)
Business
What Is Business?
Other terms that are often used to refer to a business include;FirmCompanyOrganizationCorporationEnterprise
What Is Business?
Business is the engine that powers economies around the world
Money flows; From businesses to workersFrom the workers back to the businessesBusiness provides; Goods and services you use every dayWages (money) people use to buy goods and services
What Is Business?
Making a Profit
The main goal of most businesses is to make a __________
Profit is the money that a business has left over after all the expenses and costs of running the business are paid
A business makes a profit by marketing products that customers want and are able and willing to buy Customers want and are willing to buy products that
meet their needs Therefore, businesses make a profit by satisfying the
needs and wants of their customers
Profit
Making a Profit
Sales Costs andExpenses Profit
Day 1 Assigned Work
Students please complete the following; K & U Questions #1 & 2 on page 27Thinking Question #1 on page 27Application Questions #1 on page 28
Day 2 Response Journal
What do you think are the advantages and disadvantages of owning your own business?
Create a list for each.
***Save As Feb 10 in your Response Journal Folder***
Forms of Business Ownership
There are 3 main forms of business ownership;
1.Sole Proprietorship
2.Partnership
3.Corporation
Forms of Business Ownership
A sole proprietorship is a business owned by ________ person who
Gets all profits Bears all risks
E.g. Dr. Stephan Morrison, Dentist
A partnership is a business owned by a small number of people, usually ______ or ________
Partners share profits and risks E.g. Dueck, Sauer, Jutzi & Noll Law Firm
One
TwoThree
What Is a Corporation?
A _______________ is a legal entity established for the purpose of do business Exists separately from the people who own it Therefore, the owners are not responsible for the
actions of a corporation Owned by shareholders/stockholders
• A ________ or ________ is the right to partial ownership in a corporation
• The corporation sells stock, and the people who buy the stock become the owners of the corporation
Examples; Ford, Microsoft and Rogers
Corporation
Share Stock
What Is a Corporation?
As a legal entity, a corporation can; Buy propertyManufacture productsEarn moneyLose moneySue Be sued
A corporation offers __________________ to its shareholders. Therefore …
When sued, the corporation pays the damages, the shareholders (owners) do not pay
Limited Liability
For Profit or Not-for-Profit?
In general, there are two types of business organizations;
1.For-Profit Goal of a for-profit corporation is to make a
profit for its owners It is assumed that a business is for profit,
unless otherwise stated
2.Not-for-Profit Goal of a not-for-profit is to benefit society
What Is a Not-for-Profit Organization?
A not-for-profit organization …Is a legal entityIs established to provide a benefit to societyCan make a profit
However, any profit made must be reinvested in the organization to support its cause or benefit
Also called non-profit organizations
What Is a Not-for-Profit Organization?
Examples of benefits or causes that many Not-for-Profits support include;
Raising money for medical research• E.g. Canadian Cancer Society
Protecting the environment• E.g. World Wildlife Fund
Providing services to children in need• E.g. Ronald McDonald House Charities
Canada
The Functions of Business
___________ is a general term for a category of activities
Businesses carry out numerous activities every day These activities are grouped into 4 functions;
1. Production• Making products
2. Finance• Handling money
3. Marketing • Focusing on customers
4. Management• Planning, coordinating, monitoring
Function
Production
Production is any activity related to the __________ of a product (good, service or idea)
Typically, when we think of production we think of factories and assembly lines of people putting together cars, TVs, etc.
However, production also includes; Farming Mining Construction Manufacturing
For services, production is often the service itself, for example, cutting and styling someone’s hair
Making
Finance
The finance function of business includes all activities involving ____________
Finance involves; Planning
• Developing a budget; a spending plan
Loan repayment Accounting
• Paying bills• Receiving payments• Keeping track of all money that enters or leaves
the business
Money
Marketing
Marketing helps the entire business focus on the needs and wants of the customer
Marketing includes; Learning about customers (research) Pricing Promotion (includes advertising) Selling
Management
Management includes all activities required to plan, lead, organize and control a business
Read the example in paragraph 3 on page 26 Managers look at the big picture and lead workers in
a direction that makes the business better Management activities include;
Planning Coordinating Monitoring Supervising
Day 2 Assigned Work
Students please complete the following; K & U Question #8 on page 27Thinking Questions #4 - 7 on page 27Communication Question #1 on page 28